An Economist Discovered the Pattern Behind Every Great Crash. Now a Former Pentagon Advisor Says AI Just Entered Its Final Stage.
The former CIA and Pentagon advisor breaks down the "Minsky Moment," and why he believes the AI boom has reached the most dangerous phase of a bubble
Baltimore, MD, July 30, 2026 (GLOBE NEWSWIRE) -- Jim Rickards says the biggest market collapses in history are not random. They follow a pattern, one identified decades ago by an economist most investors have never heard of. In a new presentation, the former advisor to the CIA and the Pentagon lays out that pattern, called the "Minsky Moment," and argues the AI boom has now reached its final and most dangerous stage.
The Pattern Behind Every Great Crash
The framework, Rickards explains, comes from an academic, not a trader. "It's named after Hyman Minsky, the economist who discovered it," he says.
What makes it useful, in his view, is its consistency. "It's the culmination of a series of financial events that have preceded the biggest market collapses in history," Rickards says. "And it always plays out the same way." He points to the same sequence showing up before the dotcom crash of 2000, when the Nasdaq fell nearly 80%, before the 2008 financial crisis, and even before the Great Depression of 1929.
Three Phases, and the Last One Is Where It Breaks
The pattern, as Rickards describes it, moves through three stages. It begins safely enough. "First, it starts with a hedge finance phase where companies only take on debt they can comfortably repay from cash flows," he says.
From there, as optimism builds, companies enter what he calls the speculative phase, taking on debt at a rate that outpaces their earnings. Then comes the stage that worries him most. "Then they enter the Ponzi phase, where they've taken on so much debt that they need new and more investors just to keep up with debt repayment," Rickards says. And that phase, he warns, is where things tend to go badly wrong: "the Ponzi phase is the most dangerous phase of all, because it often relies on creative accounting or sometimes even outright fraud."
Why He Says AI Is Already There
When Rickards maps that framework onto AI today, his conclusion is blunt. "Like I said, we are right here," he says, placing the boom squarely in that final phase. "And it's exactly what's happening in AI now... only on a much bigger scale."
The danger, he argues, is not just that a collapse could come, but how fast and how widely it would hit. "When the Minsky Moment hits, it almost always catches everyone off guard," he says, describing a market that soars one day and reverses the next when a single sobering report brings reality home. "The Minsky Moment always takes everyone by surprise."
His case, in the end, is that this is not a new story. "It happened in 2000... It happened in 2008... And it's happening right now," Rickards says. He frames it as his analysis rather than a certainty, but he argues the pattern is clear enough that investors should understand where the AI boom sits before the final stage plays out.
About the Presentation
In his new presentation, Jim Rickards explains the Minsky Moment framework, why he believes AI has entered the most dangerous phase of a bubble, and the steps he says investors can take to protect themselves and potentially profit if it bursts.
Jim Rickards' presentation is now available online for free. Click here to watch.
About Jim Rickards and Paradigm Press
Jim Rickards is a former advisor to the CIA and the Pentagon and the founder of the investment research publication Strategic Intelligence. His forecasting draws on complexity theory, an approach he says fewer than ten people in the world know how to properly apply, and one he credits for warnings ahead of the 2008 financial crisis and the Covid market crash.
Paradigm Press is one of the largest independent financial research publishers in the United States, with a 4.8-star Google rating across more than 1,900 reviews. It operates free of advertiser influence, dedicated to helping everyday Americans understand and act on the forces shaping their wealth.
Derek Warren Public Relations Manager Paradigm Press Group Email: dwarren@paradigmpressgroup.com
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